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This chapter examines whether social security programs in Japan induce withdrawal of the elderly from the labor force and create jobs for the young. The chapter is organized as follows. Section 7.2 provides an historical overview of social security reforms and employment policies toward the elderly. Section 7.3 presents the long-term employment and unemployment trends of both the old and the young, and performs a regression analysis to examine the direct relationship between the employment of the young and that of the old. Section 7.4 examines whether changes in social security programs are...

This chapter examines whether social security programs in Japan induce withdrawal of the elderly from the labor force and create jobs for the young. The chapter is organized as follows. Section 7.2 provides an historical overview of social security reforms and employment policies toward the elderly. Section 7.3 presents the long-term employment and unemployment trends of both the old and the young, and performs a regression analysis to examine the direct relationship between the employment of the young and that of the old. Section 7.4 examines whether changes in social security programs are associated with the employment of the young or the old, using measures for the inducement to retire. Section 7.5 draws conclusions. Youth employment issues have not motivated social security reforms and changes in provisions are not endogenous with respect to youth employment/unemployment. Youth employment tends to be positively, not negatively, associated with labor force participation. Retirement incentives for the elderly do not significantly affect the labor market outcome for the young.